A visit to
the Exhibit Hall at the 24th
Annual ACFE Global Fraud Conference brings an interesting journey through
the past: the Fraud Museum traveling exhibit features more than 20 pieces of
fraud memorabilia and artifacts from the only collection of its kind in the
world.

This year’s
exhibit, with pieces selected from the Fraud Museum’s permanent display at ACFE
Headquarters in Austin, Texas, focuses on an age-old method fraudsters employ
for their schemes: correspondence. From letters and posters to investigative
essays, “Letter of the Law: Fraud Through Correspondence” highlights infamous
frauds perpetrated through the mail system.

One of the
oldest pieces is an 1876 French letter. An attempt was made to mail it from Belfort to
Tournus, France, on June 17, 1876, with a previously used stamp. Before its
delivery, the document was intercepted by the French Postal authorities, who
noted in pencil, “timbre réuitilisé, Fraude” (stamp reused, fraud).

Another
piece is a letter written and signed by Owen Cosby Phillips (1863-1937) that outlines
what was later revealed to be a phony investment opportunity. Phillips, born of
blue blood, was knighted in England Feb. 14, 1923, as 1st Baron
Kylsant.

But
the bigger they are, the harder they fall. In 1931, 1st Baron
Kylsant was charged and convicted of fraud in connection with issuing a phony
stock prospectus. He didn’t go down without a fight, though. The Baron spent what
today would have amounted to £9,000,000 (US $14,400,000) in legal fees on his
unsuccessful defense.

Thereafter,
he was stripped of his knighthood and served one year in prison. It wasn’t all
bad, however. Because of his status as a gentleman, Phillips was entitled to
have first-class catered meals delivered to him behind bars.

The
1949 “Revolt of the Admirals” was one of the most contentious feuds in American
military history and initially focused on the B-36 intercontinental bomber. In
1947, the U.S. Air Force was created as a separate branch of the armed
services, drawing both from the Army and Navy air corps. The U.S. Navy bitterly
opposed the new Air Force, as well as the development of a plane that could fly
as far as 10,000 miles non-stop and deliver an atomic payload to bomb the
enemy. Instead, the Navy preferred continued reliance on a fleet of aircraft
carriers whose planes were quite limited in their range.

Once
long-distance bombers like the B-36 were developed, the Navy no longer dominated
bombing strategy; it was the Air Force. Navy brass did everything it could to
scuttle this new technology — to no avail. As early as 1947, when the plans for
the B-36 were initially drawn, the Navy began planting newspaper articles
critical of the project. It also enlisted the assistance of Cedric R. Worth, a
former Hollywood scriptwriter, to pen an “anonymous” letter claiming that the
B-36 project was fraught with mismanagement and fraud.

The
letter made the rounds to Congress, the public and the Navy, which convened an
inquiry board, the picture of which you can see in the Fraud Museum, to look
into the allegations. A congressional investigation failed to substantiate any
substantive wrongdoing in the project, paving the way for the B-36 and successive
long-range aircraft to become a key element of America’s defense.

Conference
attendees should make sure to visit the Fraud Museum and see these and other
pieces for a reminder of many a fraudster's favorite method of defrauding their
victims. Be sure to play the matching game on p. 71 of your conference guide for
a chance to win a $250 Visa gift card.